Business | Technology
TCS plans Abu Dhabi, Egypt and Oman centres
Tata Consultancy Services (TCS), India's largest IT-services provider, has said it will open centres in Egypt, Abu Dhabi and Oman to focus more on emerging markets, especially Middle East and North Africa (Mena), owing to the sub-prime crisis and recession tendencies in the US, its main market.
- By Naushad K. Cherrayil, Senior Sub-Editor
- Published: 00:05 April 28, 2008
Dubai: Tata Consultancy Services (TCS), India's largest IT-services provider, has said it will open centres in Egypt, Abu Dhabi and Oman to focus more on emerging markets, especially Middle East and North Africa (Mena), owing to the sub-prime crisis and recession tendencies in the US, its main market.
"Mena has been active in the last couple of years as the infrastructure, energy, utility and alternative sources of energy are showing strong growth and there are robust opportunities for further growth," S. Ramadorai, chief executive officer and managing director of TCS, told Gulf News in an exclusive interview.
The company now has centres in Dubai, Riyadh, North Africa, Morocco and Bahrain in the Mena.
The value of Mena's computer-services market is put at $50 million and the region contributes three-five per cent to the group's growth while India contributes 11 per cent.
Latin America, India and Mena countries together contribute $940 million to the group.
He said India's software industry is currently worth more than $30 billion and it is expected to grow to $60 billion-$80 billion by 2010.
Ramadorai, who took over as the CEO in 1996, has been instrumental in building TCS into a $5.7 billion global software and services company. He has now set his sights on ensuring that TCS is among the top ten software companies globally.
He said the rupee's appreciation against the dollar has eroded earnings of the company as most of its sales are generated overseas. TCS gets almost 91 per cent of its sales from overseas, including 50 per cent from the US.
Concern
"We're concerned. The way the rupee drastically appreciated in the last couple of months is definitely of concern, but we have done hedging against currency fluctuations and we're on a good wicket when it comes to hedging and there is nothing we can do beyond that," Ramadorai said. The Indian rupee has gained around 11 per cent in the last financial year (April to March).
The company is "cautious" as "when you look at the US implication of the subprime crisis and the results that are coming out, that's a cause of worry."
He said the banking, financial and insurance sectors have already taken a beating. TCS seeks to overcome the drop in profitability by raising rates charged for clients for managing computer networks.
Ramadorai claimed that TCS is the first in the industry to cross $5 billion revenues. "TCS is expected to grow more than the industry's average growth of 20-25 per cent. We will deliver sustained, profitable growth in the next financial year, helped by a new, agile customer-centric organisation structure that adds value to our clients and employees," he said.
TCS is not planning to venture into any other fields for the time being and Ramadorai said technology will remain the core area of its business. It also does not plan any share offering to raise funds.
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